ICE Snaps Up Singapore Exchange

Terry Flanagan

IntercontinentalExchange has acquired Singapore Mercantile Exchange (SMX), adding to ICE’s current network of markets and clearing houses in the U.S., Canada, Brazil, the U.K. and continental Europe.

The acquisition of SMX represents an important step in ICE’s growth trajectory as it looks to expand its customer base and markets in Asia by establishing a local exchange and clearing presence. This includes the SMX Clearing Corporation (SMXCC), a wholly owned subsidiary of SMX and the clearing house for all SMX trades.

“Fresh from taking over the NYSE and Liffe businesses, giving it a strong foothold in the U.S. equities business at the same time as acquiring one of the dominant global derivatives markets, it jumps into Asia with the acquisition of SMX,” said Philippe Carré, global head of connectivity at SunGard’s global capital markets business.

“In one swoop, ICE establishes both a trading and a clearing presence in Asia, which other global Exchanges have been patiently building over the last 10 years on the trading side- one of the key differences being that ICE also gets an Asian clearing house in the deal,” said Carré. “ICE now should consider following this through with a strong pipeline of product offerings catering to its different audiences globally and build an integrated model out of these diverse businesses.”

In recent years, Asia-based trading activity in ICE’s benchmark energy and interest rate products has been rising as the region increases in importance in global markets. ICE has had a presence in Singapore for over a decade.

ICE chairman and CEO Jeff Sprecher said that SMX would enable ICE “to better access our Asian customers with this exchange and clearing house in Singapore. So, this resulting infrastructure in the U.S., in Canada, in Brazil, in the UK, in the Eurozone and now in Singapore positions us well for shifts in business as regional regulation continues to unfold and as our customers are reorganizing to comply.”

Together with the NYSE Euronext acquisition, ICE will operate 17 exchanges and 6 clearing houses in 8 countries. It e anticipates a period of business transition with the Singapore Mercantile Exchange and the Singapore Mercantile Exchange Clearing Corporation as it implements technology changes and works with market participants, clearing members, and regulators to ensure that the product offering and clearing strategy will meet the needs of the region, Sprecher said.

“The first order of business, however, is to complete the extensive work required to separate Liffe from Euronext,” he said. “There is a detailed work plan underway and we anticipate completing the separation work in the first half of 2014.”

There will be ongoing regulatory approvals required as we undergo this complex reorganization which must occur before any Euronext separation can take place.

Upon the separation from Euronext, Liffe will be integrated with ICE Futures Europe, our London-based futures exchange and the two will operate as a single subsidiary. ICE is currently electing identical boards of directors for ICE Futures Europe and for Liffe, by adding new members to the ICE Futures Europe board with interest rate and financial market expertise.

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